JEFFERSON CITY, Mo. (AP) — State governments emerging from the coronavirus pandemic built historic cash surpluses as inflation in prices and wages drove up sales and income tax collections.
Many states are reaping another reward: banking millions of dollars off those surpluses as the Federal Reserve fights inflation with higher interest rates.
“We’re catching both ends of it,” said Missouri Treasurer Scott Fitzpatrick, a Republican. First, “we received a lot of extra money,” he said. “Now, nominally, we’re benefiting from the increase in interest rates from the Fed.”
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